Casino bill has $50m for health overhaul

Aims to help set up pay system

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Passage of the casino bill this week boosted efforts to overhaul how hospitals and doctors are paid, allocating $50 million of anticipated gambling license fees to help health providers prepare for a new way of treating patients.

Legislative leaders who spoke yesterday at a health care conference in Boston said that they are still working out details but that the money may be used to buy new computers and software to enable providers to better coordinate patients’ care and track costs so they can stick to a budget. It also may be used to hire more workers, including case managers in physicians’ offices, who would call or visit patients to make sure they are taking medications and getting other follow-up care, said David Seltz, senior policy adviser for Senate President Therese Murray.

Almost one-fourth of the money the state expects to raise from one-time licensing fees for three casinos and a slot parlor will go into a “health care payment reform fund.’’ The fees also will give an infusion of dollars to community colleges, local aid for cities and towns, and transportation projects. But the largest chunk is for health care.

“We are going to need to make sure there is some investment in the system during this transition period,’’ Seltz said during the conference.

Legislators are drafting a bill that would shift health providers in Massachusetts to a system of global payments, in which providers would be given a monthly per-patient budget for all care, rather than billing for each service. Critics say the current fee-for-service system creates incentives to provide excessive care and lacks coordination.

Representative Steven Walsh, cochairman of the Joint Committee on Health Care Financing, said once legislation is finished early next year, leaders will know where the casino money is most needed - and industry lobbying for the dollars probably will begin.

There is general agreement among government officials and the industry that the state should move to a system of global payments. But the parties disagree about whether the government should step in to bring down costs, particularly the higher fees that insurers and government payers pay some influential hospitals and doctors groups with market power because of their reputations or geographical dominance. Critics say they earn more money than competitors with less clout without necessarily providing better care.

Many hospitals and doctors oppose government regulation, saying market forces are already working to slow the rise in health costs, while some consumer groups and health plans are in favor of state intervention and have made proposals to reduce payment inequities.

At the conference yesterday sponsored by the Massachusetts Association of Health Plans, Attorney General Martha Coakley said legislators should give the administration the power to reject health plan contracts with excessive provider price variations starting in 2015.

Health plans should be prohibited from paying provider rates that differ beyond a certain band, for example 20 percent above or 20 percent below the plan’s average price for similar providers for the previous year. Any savings would then be directed to consumers in the form of lower premiums, she said.

Brian Rosman, research director at Health Care for All, a Boston-based consumer group, agreed “there needs to be oversight of what hospitals and doctors charge to make sure patients are being charged a reasonable amount.’’

But Lynn Nicholas, president of the Massachusetts Hospital Association, said “we need to take a time out’’ before harming the finances of one of the state’s most important industries. “Hospitals are arguably already the most regulated industry in Massachusetts. They are already facing Medicare cuts. Piling on additional regulations like this is going to have a bad result.’’

In her proposal, Coakley said the administration should have the authority to track the impact of mergers, and when a provider reaches a certain level of market clout, it should trigger a review to determine whether the provider’s size is having a negative impact on consumer choice, access, or healthy market function.

Coakley’s office also is considering requirements that providers disclose the full amount that consumers could be liable to pay for treatment. Consumers complain to her office that when they ask how much a medical service will cost, they are told “not to worry about it,’’ she said. But then when their insurance companies do not cover those costs, they are stuck with a huge bill.

One woman had a nonemergency medical procedure and needed transportation home. Hospital staff arranged an ambulance, and two weeks later she was shocked to receive a bill for more than $2,000, Coakley said.

Dr. Lynda Young, president of the Massachusetts Medical Society, which represents physicians, said in an interview that there may be more to that example than meets the eye. “What if something happens in the cab? Then the hospital is liable.’’

She said doctors want to tell patients how much care will cost - but often they don’t have access to that information. She called an insurer recently to ask how much an X-ray would cost for a patient with a particular type of health plan at various hospitals. “They said, ‘I can’t tell you that, that’s proprietary.’ ’’ she said.

“The majority of doctors would be willing to provide this information - but they have to know where to look and it has to be accessible to them and reliable,’’ Young said.